ABSTRACT
Property rating is not a new phenomenon in history; it is as old as a man himself. The payment of tax was originated as man learnt to live together in an organized community. In Africa society for instance, grown up males are often participating in a communal labor to maintain the path way leading to village, farm kinds, construction of roads, public square.
In view of the above historical facts, Abeokuta North Local Government Area is been involved in the course of rating exercise. This was backed up by the tenement rate edict of 1995, an edict that makes provision for the levying and collection of tenement rate on properties in Ogun State. The effective year that the local government under study started the exercise was 1996, while they did re-assessment in 1995, up till date.
The local government in responsible for collection of the tenement rate but they are proposing to give it to a quality estate surveyor and valuers who is capable to collect the rates.
This study is meant to confirm the challenges of property rating within the period of 1996 till date as well as to evaluate some of the benefits and problems confronting the success of rating exercise and the importance of property rating which make it serves as a durable source of revenue to the local government.
Table of Contents.
CHAPTER
ONE
1.0 INTRODUCTION
1.1 STATEMENT
OF PROBLEMS
1.2 AIM AND
OBJECTIVES
1.3 SIGNIFICANCE
OF THE STUDY
1.4 SCOPE OF
THE STUDY
1.5 LIMITATIONS
OF STUDY
1.6 STUDY
AREA
1.7 DEFINITION
OF TERMS
CHAPTER TWO
2.0 HISTORICAL
BACKGROUND OF PROPERTY RATING IN NIGERIA
2.1 METHODS
OF RATING ASSESSMENT
2.2 PROPERTY
RATING ADMINISTRATION
2.3 THE RATING AUTHORITY
2.4 TYPES OF PROPERTY TAX
2.5 MAJOR TYPE OF PROPERTY
2.6 PROPERTY RATING PROCESS.
CHAPTER THREE
3.1 RESEARCH
METHODOLOGY
3.2 RESEARCH
DESIGN
3.3 POPULATION
OF THE STUDY
3.4 SAMPLE
SIZE
3.5 SAMPLING
TECHNIQUES
3.6 DATA
FOR THE STUDY
3.6.1 Primary data
3.6.2 Secondary data
3.7 TOOLS
FOR DATA COLLECTION
3.9 PROCEDURE FOR THE ADMINISTRATION OF THE QUESTIONNAIRE
3.10 PROCEDURE OF THE COLLECTION OF DATA
3.11 TOOLS FOR DATA ANALYSIS
3.12 PROBLEM ENCOUNTERED
5.3 RECOMMENDATION
REFERENCES
CHAPTER ONE
1.0 INTRODUCTION
Property rating is a form of tax levied on real
property and it is normally charged at local level for raising the revenue to
carry out specific developmental projects. These rates are levied annually on
owners or occupiers of landed property. It is charged on the annual value of
occupation of the tenement and should reflect the income earning capacity of
the built up landed property.
Historically, rating system has its
origin in the Poor Relief Act, 1601 generally referred to in Britain as “the statute of Elizabeth”. This system inherited from
Britain in 19th century has been recognized as a potentially rich
source of raising fund within a Local Government Area for the purpose of
providing and maintaining essential services and amenities in the rating area –
such as roads, market squares, motor parks, communal halls are maintained
through communal efforts. Individual in the community contribute their income
and services for the up keep in their leaders’ household.
It is the present day made of living and
modernization that brought about the present sophistication and form of its
application and collection. The local government now takes some of the roles
formerly played by the Obas, Obis or Emirs which are presently more complicated
like provision of electricity, schools, roads, clinics, refuse proposal
services etc.
The first real attempt to property
rating was through the federal government guideline for local government reform
of August, 1976. This document was designed to give guidelines on the
structure, finance and administration of local government in the federation.
The document introduced a pattern of rating law for the entire country and
since then, all estate government have based their Rating Edict or Laws on it
with very little modification. If is important to know that the major
principles of the rating system in Nigeria is to defray the Local
Government expenses. For example, that of Ogun state was called Tenement Rate
Edict of 1995, where property types were zoned and appropriate unit was
adopted. Thus the x – ray of the system in Nigeria was that of Tenement Rating,
where value of the property for rating purpose is ascertained by a qualified
estate surveyors and valuers and a percentage of the property is multiplied by
a rate Nairrage to be adopted by the Rating Authority.
Property Rating is a viable or stable
source of revenue generation, though 70 – 80% of the total revenue to the local
Government. In Nigeria
is from the federal statutory allocation.
This
Rating is a way of broadening the financial base of Local Government to provide
necessary facilities for its subject.
Other
source through which the Local Government can raise funds are, insurance of
death and birth certificate, approval of plans, revenue from motor parks and
market, insurance of license etc.
1.1 STATEMENT
OF PROBLEMS
The
problem associated with rate collection cannot be underestimated. That is why
many Local Government have not being embarking on the implementation.
It
is important to say that rating can only be effective when certain conditions
such as street numbering, culture, qualified personnel, population etc have to
be taken into consideration. Many Rating Authorities did not considered these
that is why collection of rate is very tedious.
1.2 AIM AND
OBJECTIVES
Aims
The aim of this study is to examine the challenges
associated with Property Rating in Abeokuta North Local Government of Ogun
State.
Objectives
- To identify the rateable hereditament in
the case study.
- To examine the process of assessment of
reteable properties within the case study.
- To evaluate level of awareness of
property rating by general public especially in the study area.
- To identify the challenges of property in
the study area.
- To recommended possible solution to
problem, the Local Government is facing as a result of rating exercise.
1.3 SIGNIFICANCE
OF THE STUDY
The research shall be of immeasurable importance to
the case study in particular and other local government area in Nigeria,
because the research will provide possible solution to the local government
area.
The research will also be useful to
determine the effectiveness of the rate collection in Nigeria.
1.4 SCOPE OF
THE STUDY
The study covers
Abeokuta North Rating Authority.
The data for
this project was based on the information collected from the following.
- Kunle Olubode and company and Muri-Adi
and associate (Estate firms)
- Abeokuta North Local Government (The
Local Government under study). The study will covers the amount realized from
property rating since 2007 – 2011 in the Local Government.
- Respondents to questionnaires.
1.5 LIMITATIONS
OF STUDY
(a) Non – availability of some important
respondents as at the time of visits.
(b) Non availability of relevant textbook in the
library.
(c) Financial constraint – Money sometimes,
delay in carrying out some research.
(d) The time and stress involved in convincing
respondents on the importance of the study.
1.6 STUDY
AREA
Abeokuta North Local Government has its headquarters
at Akomoje in the Iberekodo Area of Abeokuta
Ogun State
capital.
The Local Government first came into
existence in 1981, as Abeokuta South Local Government the same year to make up
the defunct Abeokuta Local Government it however re – emerged again on 27th
September, 1991 when the federal government moved closer to the people at the
grassroots.
The local government share common
boundaries with the Odeda Local Government – North, Ewekoro local government –
south, Abeokuta
south local government – East, Yewa North local government – West.
Olumo rock is one of the most
outstanding historical and socio – cultural landmarks in the Local Government
Area and Abeokuta
in general. The rock is situated in Abeokuta
between Ikija and Ikehreku. It is 137 metres above the sea level. The rock is a
massive outcrop of granite rock of primitive formation from which the state
capital derives its name “Abeokuta”
meaning under the rock. It served as a refuge for solders during the old Egba
inter – tribal wars. Apart from the fact it is a symbol of faith, unity and
strength it remains sacred in the history of Egba land.
Abeokuta North Local Government Area has
a projected population (in 1994) of about 200,000 people more than 90% of the
area is rural, although more than 75% of people live in the urban area of the
Local Government.
But as at 2006 census, the population of
Abeokuta North Local Government was 201, 329 people with the area of 808km2.
The Local Government includes the Oyan Dam, an important source of water to the
cities of Lagos and Abeokuta.
The local government has 77 public
primary schools and 14 secondary schools with 16 wards.
1.7 DEFINITION
OF TERMS
1. Property
– Is the right that one has in land or goods to the exclusion of all others
rights gained from the ownership of wealth.
2. Property
Rating – This is a form of tax, levied on real property and it is normally
charged at local level for raising the required revenue to carryout specific
development project. This tax is aimed at promoting the total well being of
inhabitants of the local community.
3. Rate
Nairrage – This is the rate in the naira force, in the rating area where
the hereditament is located. Such rate is often fixed periodically after
considering the financial needs of the rating authority.
4. Capital
value – This means the amount of money which may be obtained for an
interest at a particular time from those individuals who are able and willing
to purchase it.
5. Annual
Value: This implies “the rent at which any tenement or hereditament might
reasonably be expected to let in the open market irrespective of the letting
arrangement of the landlord and tenant”.
6. Rebus
Sic Stantibus: It is most basic principle in rating it explained that all
hereditament must be valued as they exist as at the time when the rate is being
made (i.e. the property to value must be assed in the condition, state and
circumstance existing at the time of assessment.
7. Hypothetical
Tenancy: This refers to all potential occupiers and actual occupiers as
possible yearly tenants thus; the facts that a properly owner occupier is
irrelevant.
8. Gross
Value: It is defined in section 19(6) of General Act of 1967, as “the rent
at which a hereditament might reasonable be expected to led from year to year
if the tenant undertook to pay all usual tenant rates and taxes and landlord
undertook to bear the cost of repairs and insurance and other expense if any
necessary to maintain the hereditament in a state to command the rent”.
Since
then, all estate government have based their Rating Edict or Laws on it with
very little modification. It is important to know that the major principle of
the rating system in Nigeria
is to defray the Local Government Expenses. For example, that of Ogun State
was called Tenement Rate Edicit of 1995, where property types was zoned and
appropriate unit was adopted. Thus the x – ray of the system in Nigeria was
that of Tenement Rating, where value of the property for rating purpose to
ascertain by a qualified Estate Surveyor and Values and a percentage of the
capital value which constitute the retable value of the property is multiplied
by a rate nairage to be adopted by the Rating Authority.
Property
Rating is a viable or stable source of revenue generation, through 70 – 80% of
the total revenue to the Local Government in Nigeria is from the federal
statutory allocation. This Rating is a way of broadening the financial base of
Local Government to provide necessary facilities for its subject.
Other
sources through which the Local Government can raise funds are issuance of
death and birth certificate, approval of plans, revenue from Motor Park
and market, insurance of licence etc.
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